fr
M UNIVERSITY PARK -
i| Replacing the school
M property tax with an income
S tax would lower tax burdens
|| for many people, an
|| economist at Penn State
||t suggests.
H “Citizens must be con-
Jcerned, however, with what
is given up if the property
tax is no longer used to
H finance schools,” declared
R. Alter,
J agricultural economist with
the College of Agriculture at
H Penn State.
‘s Alter said a senes of
« court cases since about 1970
1| has raised serious questions
% regardmg the role of the
H property tax in financing
schools.
% The courts, in general,
$ have objected to school
I finance systems where the
,1 Quality of a student’s
: plication appears to be
determined largely by
school district property
I wealth. In general, state aid
]to equalize such
i discrepancies among school
j, districts has been
\ madequate, Alter pointed
, out.
Using 1975 as a typical
year, Alter and associates
found that property taxes in
Pennsylvania ranged from
7.5 per cent of income for
farmers with the lowest
income to 1.4 per cent of
income for nonfarmers with
the highest incomes.
4,000 WATT
120/240 VOLTS
MANUAL $ 7OO
ELECTRIC $ 740
W//VCO /
- I
2,500 WATT
120 VOLT
$ 472
Income tax could replace property tax
Farm tax burdens were
consistently higher than
those of nonfarmers for all
income groups and in total,
he added.
Dissatisfactions with the
property tax exist on the'
part of both citizens and
government officials. Alter
reported.
The property tax is in
convenient in that many
taxpayers must make larger
lump sum payments once or
twice a year. Also, the tax
seems uncertain to many
people due to the seemingly
complicated way of making
assessments, millage rates,
and tax levies.
The property tax_is often
viewed as inefficient, it was
stated, since it tends to
encourage urban sprawl and
the conversion of farm and
other open spaces to higher,
more intensive uses. And the
property tax, Alter pointed
out, sometimes causes
communities to compete for
tax base while minimizing
service costs.
This latter situation, he
said, can distort the
distribution of development
and public services among
communities.
Additionally, the property
tax is considered
inequitable, since many
people believe such tax
burdens fall more heavily on
the poor than the rich. Also,
most people see little
W^nfl
20%
ST
The local flat rate tax was
followed in order of ef
fectiveness by, first, a
combined flat rate state and
local income tax, and
second, by a flat rate state
income tax for schools.
Under each of these
alternatives, taxes for
farmers would on the averge
be reduced significantly, it
was stated. For nonfarmers,
taxes would be reduced on
the average except for
people with incomes over
INVENTORY REDUCTION
LEONARD MARTIN CO.
330 Fonderwhite Rd., Lebanon, PA 17042
Phone 717-274-1483
★ 24 HOUR SERVICE * RADIO DISPATCHED TRUCKS
relationship between
property tax payments and
the benefits from public
services.
Property tax reform
generally means three
things, it was pointed out.
First, there is the possibility
of improving administration
of the current system.
Second, the current
property tax can sometimes
be modified to make it more
equitable and to reduce
other negative aspects. A
third reform is to substitute,
completely or partially,
another tax source for
property tax.
Alter and associates
studied both local and state
income taxes as full sub
stitutes for the 1975 school
property tax.
They found that a local flat
rate income tax would
generally lead to the
greatest decrease in tax
burdens for most taxpayers.
ONLY 4 LEFT
DISTRIBUTED BY:
$15,000 where 1975 school
property taxes were levied
at 1.4 per cent of income.
The increases, however,
would be less than the tax
reductions experienced by
other nonfarm and farm
taxpayers.
Variations in local
property and income tax
bases would result in some
differences from this
general summary of tax
burden changes, Alter noted.
In defense of the property
tax. Alter said it is a
Vegetable oil sales protected
WASHINGTON, D.C. -
Exporters who sell U.S.
vegetable oils to Poland may
apply for up to $3 million,
protection against payment
defaults for non-commercial
reasons, Kelly M. Harrison,
general sales manager for
the U.S. Department of
Agriculture, announced
today.
This protection is being
offered under the Com
modity Credit Corporation’s
non-ccmmercial risk
assurance program.
Under the $3OO million in
coverage offered earlier on
U.S. exports to Poland, up to
$ll2 million has been
designated for feed grains,
$34 million for wheat, $30.8
million for soybeans, $54.28
million for protein meals, $5
Lancaster Farming, Saturday, February 2,1980—A23
productive source of
revenue. Then too, property
tax decisions keep citizens
keenly aware of, and in
volved in, decisions
regardmg school district
revenue and expenditures.
“It is important to note,”
Alter commented, that many
of the inefficiencies and
inequities associated with
the property tax could be
made less severe through
reforms of admimnstration
and policy within the
existing property tax
million for edible soy
protein, $25 million for
cotton, $8 million for
tobacco, $5.95 million for
tallow, and $3 million for
vegetable oils. The
remaining $21.97 million in
commodity designations will
be announced later.
Before applying for this
protection, an exporter must
have a sale calling for export
no later than August 31,1980.
Applications must be sub
mitted before the export is
completed and the
assurance fee must ac
company the application.
The fee rate is 15.5 cents
for $lOO for six months; 23.2
cents per $lOO for one year;
38.8 cents per $lOO for two
years; and 56 cents per $lOO
for three years, based on
<c
\ hVFh/co
5,300 WATT
120/240 VOLTS
MANUAL *960
ELECTRIC *lOOO
system.”
He said the property tax is
truly a local tax, in that most
decisions regarding its use
are made locally. Moving to
a state income tax to finance
schools could weaken the
link between preferences for
local expenditures and
decisions to fund these ex
penditures, he observed.
The project was supported
in part by fair funds ad
ministered by the Penn
sylvania Department of
Agriculture.
semiannual repayments of
principal plus accrued in
terest. Based on equal an
nual repayments of principal
plus accrued interest, the fee
rate is 32.3 cents per $lOO for
one year; 49.2 cents per $lOO
for two years, and 67.9 cents
per $lOO for three years.
1,500 WATT
120 VOLTS
$ 396